Futures are down this morning on renewed concerns about the CoronaVirus. New update out of China confirms 254 new deaths and over 15,000 new cases. First and foremost I think of the families and communities impacted by this in China. Secondarily it puts an uncertainty in the market. Today’s trade idea brings another momentum name to the forefront, Twilio Inc (NYSE:TWLO). The technical chart looks primed for a upside rally.
TWLO Hourly Chart
You’ve got three key elements. First, an up move off a reversal. Second a consolidation sideways that creates a channel. Third, the 13-period moving average crossing over the 30-period moving average.
It’s really that simple. Give yourself some leeway with the wicks of the candles. Otherwise, you pretty much define the range, scale into the trade, and scale out.
The key to making this work in the long-run is risk management. You can take a strategy that only wins 10% of the time and make it a winner if you size your bets appropriately.